Experts say rising gas prices signal better economy

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Richard Essex/Eyewitness News

Indianapolis - Gas prices are going up, but some experts believe it's a good sign for the economy.

It comes back to supply and demand. With more production in the United States, economists say more people are working and the demand for gas equals higher gas prices.

"We want a strong economy, but the down side is that the demand for oil goes up and it makes gasoline prices higher at the same time," said Butler professor Bill Rieber.

Higher gas prices may hurt today, but Rieber says the dollars rolling off faster at the pump is actually a sign that the economy is starting to take a positive turn. He says the higher price at the pump is not profit taking by oil speculators.

"The economy is getting stronger, there is more production in the U.S. and elsewhere, so the demand is going up," he said.

But the higher prices are still a burden.

"Oh yeah. I just paid $25 and I got less than 10 gallons," said Stacy Ardelelan of Mooresville.

If this is a sign of recovery, some are hoping the recovery is short-lived.

"Whatever I have to get by. I don't drive around like I used to. Can't afford that," said Mark Green of Plainfield.

"Quite a bit, really. I have five kids at home, it is not easy on us," said Justin Nuetzman. "It really has been troubling times this past year or two."

Prices are expected to stay at higher-than-normal levels for the foreseeable future. The early extreme cold is also helping drive prices up, along with some political uncertainties around the world.

"It is a very volatile market. It shifts, because of supply and demand conditions, very quickly and demand is stronger now," Rieber said.

Prices tanked at about the same time the economy started to fail and the prices are expected to continue to rise as the economy continues to improve.